Stealth Layoffs And Sam Alito On Tilt

Episode Notes

Transcript

Joe Patrice:

Hello, welcome to another edition of Thinking Like a Lawyer. I’m Joe Patrice from Above the Law. I’m joined by my colleagues, Kathryn Rubino and Chris Williams. And we are here to discuss the big stories from the week that was in legal. We will, however, begin with a little bit of small talk, which we shouldn’t. I guess we’re recording this a little early so we can’t toast, but we should toast with our Kash Patel bourbon.

Chris Williams:

Is that any bourbon?

Joe Patrice:

No, he has-

Kathryn Rubino:

It is Woodford Reserve, which is the answer to a trivia question on Above the Law this past week, but also it is a bottle of Woodford Reserve that has been specially engraved with the logo of the FBI, the stylized version of Kash Patel’s name, meaning that there’s a dollar sign in lieu of an S in Kash. And number nine, because he’s the ninth FBI director because this is the world we live in.

Chris Williams:

Yeah. Well, I will say, I do think it is cool when people get commemorated things. One of the coolest things I remember about Obama besides the bombing children thing was the bomber jacket that he had that had the nice little 44 on the wrist of it. Yeah. So I respect the nine aspect of it. If you’re going to get a personalized thing, have the number of the thing that you are on it. I do think that dollar sounds a little tacky.

Kathryn Rubino:

Yeah. And I think that, and certainly this was based on reporting out of the Atlantic. And the thing that makes it awkward of course is that this is somebody who’s been reported, spends a lot of time inebriated according to other folks’ reporting. And there’s also a code of conduct at the FBI saying that there should never be an appearance of inebriation, et cetera, et cetera. And here he is giving out full bottles of bourbon. And one of the lines in the original Atlantic was, oh, does anybody ever recall another FBI director having personalized bottles of bourbon? And the response from a career FBI agent was laughter.

Joe Patrice:

Yeah. I mean, like Chris said, it’s objectively cool to have little commemorative things. That said, I don’t think you should be using the logo of a government agency that taxpayers pay for that you’re in charge of on your little commemorative thing. And it definitely shouldn’t be a bottle of bourbon when you’re running the FBI.

Chris Williams:

Yeah. I would say Woodward Reserve, this is a great opportunity. You need to get Jedgar, Boozer, you need to get Pete Hexset and then have a series where you just have it called the Liquor Cabinet.

Joe Patrice:

Yeah.

Kathryn Rubino:

Listen, I think that this is a great retirement gift for somebody who is on their way out and is not currently in charge of criminal law enforcement in this country when you’re not worried about whether or not they’re having a drink in midday because they’re retiring. I think it’s a great option for something like that. This also reminds me of the cold opening this past week on Saturday Night Live, which it featured prominently the bottle of bourbon and also my new drink order, which is the six three decision, six Bud Lights and Three Shots of Bourbon.

Joe Patrice:

Of JMO.

Kathryn Rubino:

Oh, JMO. You’re right. There you go.

Joe Patrice:

But yes, no, look, the bottle situation, like I said, it’s not so much that that’s a problem, but it speaks to a broader judgment issue. If you don’t understand why this would be a problem, then that suggests that you might not have the temperament to do this job. Let’s just put it that way. Yeah.

Chris Williams:

One last small talk thing. Are you a renowned hotdog eating champion yet, Joe?

Joe Patrice:

I haven’t checked whether or not that’s taken off yet, but no, that’s a reference to a story that I … A joke I made in a story or a reference, I guess, to made in a story about AI, which is there was somebody who recently, to prove how bad those AI summaries that Google gives you are, just put out some fake stories that he was a hotdog eating champion and then found relatively quickly that they got worked into those official summaries, even though it was completely untrue. But yeah, no. So I threw that out there as a gag. I didn’t put as much effort into it as he did though. So my guess is it doesn’t. It hasn’t registered my success yet. Oh, well. All right. Well, we

Kathryn Rubino:

Have- For some big talk.

Joe Patrice:

Yeah, no, it is time for some big talk. In particular, our big talk is that we are unfortunately talking about layoffs again.

Kathryn Rubino:

Yeah. Recession indicator, big loss style.

Joe Patrice:

Layoffs. We’re talking about layoffs. You kidding me? Layoffs. Yeah. Well, that’s our playoffs soundtrack, which we play for layoffs.

Kathryn Rubino:

I do enjoy that. But yes, there are two big stories that actually came out. We broke the same day, first of which is Paul Weiss, which we’ve spent a fair amount of airtime talking about the travails at Paul Weiss over the last couple of years, but these were characterized as stealth layoffs, meaning of course that there’s no official layoff that the firm is engaged in and instead they couch it in terms of performance review. Mind you, the associates, there’s a shocking number if they’re just performance related because you don’t generally get rid of five to 10 people in the same department that are similar years all at one go if they’re performance related or strictly performance related. But it’s also folks that have had great reviews up until all of a sudden the economic conditions change and then all of a sudden they have kind of an intense problem that small mistake that you made in some brief is enough to start that hill rolling down and you find yourself out of a job where if the economic conditions were different, you would be joyfully promoted with the rest of your class.

We’ve talked about stealth layoffs a lot at Above the Law and I think that they are one of the most awful insidious things that happen at big law.

Joe Patrice:

It’s bad and it’s a little gutless.

Kathryn Rubino:

It’s a lot gutless. A

Joe Patrice:

Lot gutless. Yeah. It’s a lot. Paul Weiss obviously is the one that we’re talking about the most. They’re the ones who are very upfront that … Well, not upfront, the opposite. They’re the ones who are out there saying these were performance, even though it seems from the chatter that there are a lot of people involved. And it’s weird when there’s-

Kathryn Rubino:

They’re litigation too, which is the real, to me, the sticking point. We’ve covered extensively the amount of litigation talent in the partnership and senior level that has exited the firm in the wake of its deals with the Trump administration and in the wake of the Scott Barshay administration of the firm that they’re focusing more on the corporate side as opposed to litigation. There’s a ton of talent on the partnership level that’s gone and all of a sudden all those associates in litigation that were hired assuming a lot more work was coming in the door in that department all of a sudden now there’s performance issues. It’s questionable.

Joe Patrice:

It’s also such a weird move to make because it’s just like a cell phone that you’ve done a really bad job of hiring if it were true. You’re like, oh, the issue is we did some hiring and it turns out we were just 25% wrong on everybody we hire.That’s ridiculous.

Kathryn Rubino:

All third to fourth year is weird.

Joe Patrice:

Yeah. It makes no sense. So yeah, it’s bad, but this wasn’t our only

Kathryn Rubino:

Layoff

Joe Patrice:

Story.

Kathryn Rubino:

Yeah. McDermott, Will and Schulte were very upfront about their layoffs in comparison. And they had recently, it used to be Schulte Roth and McDermott Will and Emirate, and they came together. They’re a new firm and there are redundancies that happen when there are these sorts of mergers. And while staff usually bears the brunt of those kind of redundancies, they also happened in the associate ranks. They were very upfront about what happened, that they grateful to the associates. Their work was great. It’s not their fault, but bigger firm means we don’t need quite as many people doing the same job.

Joe Patrice:

Yeah. That has historically been a side effect, these sorts of mergers that nobody wants to talk about. Everyone gets really excited about how you put two things together and now you’re in the AmLaw 50 or higher, but nobody really talks about the, especially in big markets. The most successful mergers on a lot of levels are where you are taking a couple of regional firms from different places and there’s not a lot of overlap. When though you take big firms that both have big New York offices, something’s going to give.

Chris Williams:

Yeah. The thing I don’t get, like Kathryn was saying earlier, it’s not that hard to triangulate when layoffs are happening, especially when you have things like Fishbowl where people are talking to each other. Even if there is some sort of veil of anonymity, you notice after a while the trends and sites like us where we encourage people to send in tips are encouraged to write about it. Why not just be honest like McDermott was, what’s the incentive of lying about doing layoffs when you’ve clearly

Kathryn Rubino:

Done them? Well, I do think that they’re hoping that mainstream media doesn’t pick it up. And this story, I think particularly for a firm that is already dealing with some PR hits is that they don’t have the law school students talking about it and that they kind of avoid that bubble. I think that’s part of it. And I think that it very much depends on the notion of shame that these are … Listen, people who are in big law, people who have excelled academically throughout their entirety of their lives and all of a sudden to say,” You, you’re terrible at your job, you need to be gone, “is a big ego hit for folks who aren’t used to that. So they’re depending on that kind of shame and failure for people to keep quiet.

Joe Patrice:

Yeah. No, and it used to be a lot easier for that. And I think the existence of things like Fishbowl and all have nurtured a generation that’s more willing to be open about these things happening to them. But I think during the, for instance, the big recession at this point, however many years ago that was-

Kathryn Rubino:

2009, yeah. 17, right? Yeah,

Joe Patrice:

Right. Yeah. But back then it was very true that nobody wanted to talk about these things because you felt like it was you, not the

Kathryn Rubino:

Issue. 100%. And I think that there’s also amount of self-delusion too at the firms because I imagine at, I don’t know that it’s exactly how this happens at Paul Weiss, but at a firm X, they’re saying, well, it is performance-based because it’s not like we’re cutting 10% across the board where we need to cut 10%, so we’re cutting the worst 10%. So there’s some sort of arbitrary justification that is performance based in some way, but to be very clear, if they didn’t have those same economic pressures, everyone would’ve been promoted and gotten their full bonuses.

Joe Patrice:

Right. Yeah. No, it’s bad. It probably will get worse. Do

Kathryn Rubino:

You think that other firms will do it get worse or more at these firms?

Joe Patrice:

Other firms. I think that there are unique conditions in both of these situations that make litigation for what’s all going on at Poll Weiss and the merger here. That said, we are looking at in particular across litigation everywhere we’ve got a federal government that is not bringing prosecutions that is really bad for the white collar side of the work. We have antitrust being basically non-existent. The government is doing a lot to make litigation hard and that will have an impact at some point. We have the AI issue on the side too. I think these are kind of early bellwether canaries sort

Kathryn Rubino:

Of. I also think the other big one that’ll be impacted is the size of their incoming classes.

Joe Patrice:

True.

Kathryn Rubino:

I think that’s another sort of indicator to look for in the future.

Joe Patrice:

All right. Well, let’s take a break and come back and talk about how some lawyers can make some money on the side. All right. So if you think that your job in legal may be jeopardized, there is a way to make money on the side insider trading.

Kathryn Rubino:

Okay. Don’t do that. That is terrible advice.

Chris Williams:

Wait, is this a Kalashi ad?

Kathryn Rubino:

No, there was a major story last week that spanned the worlds of finance and big law. Some 30 individuals, corporate attorneys and various finance professionals that were errexted in connection to an insider trading scheme. At least two folks have been identified and they are both attorneys, Nicolotrafan, I’m not sure how to say his name, but Yale Law School graduate who was a serial big law jumper went from firm to firm to firm and reportedly used information that he found at firms in order to make some trades that were wildly successful. And he and his partner, another attorney who was in I think a small law firm, they recruited a network of other people that they went to law school with, that they went to undergrad with, that they knew from various deals in order to get this information and kind of farmed it out into larger groups of folks in order to avoid being caught.

We also have information that a Wilkie Farr council now former appears to be cooperating with the government. There was another document that was also unsealed at the same time that the bigger indictment came down that identified this individual and it was since been pulled from the docket after news outlets realized that this person was named. So makes it pretty clear what’s going on here. I believe that he went to law school with some of the other folks and that’s how it appears to be how he got pulled into the scheme.

Joe Patrice:

Look, I mean, this is one of the first … I was on the litigation side, but one of the first things that we were told when we showed up at a big law firm was not to do exactly this. Well,

Kathryn Rubino:

This is exactly what you’re not supposed to

Joe Patrice:

Do. Yeah. And even though I was on the side where on the litigation side, by that point the deals have pretty much gone south, so it’s all kind of public, but you have access to document management systems and stuff like that. You can learn things. And so you were told, “Definitely don’t do this. ” We were all told not to have individual stocks at all to do all of our investing with mutual funds for that reason. And

Kathryn Rubino:

It’s very clear, again, because he appears to be cooperating with the government, but Gershwitz, that’s the person who appears to have turned the amounts of money, it’s because they have this kind of larger network and he really told them a lot of details about how they tried to evade detection for as long as they did. But it would be like he found something out about a deal at his firm and then it went to two layers of extended networks of folks who then purchased between two to $3 million of stock in that particular deal and he wound up with a $30,000 kickback as a result.

Joe Patrice:

Yeah. Now, I mean, I will say 20 years ago the New York Stock Exchange claimed that they had sufficiently well-developed tech to catch people even if they were using intermediaries and this sort of thing. It would seem to me as though that was perhaps a little overstated if this was able to go on for as long as it was years after the fact, because all of this is exactly the behavior that they said we are very well equipped to catch.

Kathryn Rubino:

It definitely is going on for a number of years. One of the other specific examples that is involved or in the indictment specifically is the iRobot deal, which happened back in, or didn’t happen, but was announced back in 2022. So you’re talking about a number of years that this all happens and went down. And I’m sure there’s thought that even dates further back when we start of piecing it together from the information that’s in the indictment.

Chris Williams:

I will say this is a good time to get caught as part of a major insider trading scheme because whatever you’re doing fails into comparison with whatever happening with the administration. So you aren’t the big name.

Joe Patrice:

Look, buying 900 million in oil shorts right before trying to claim that the strait is closed again or whatever is going on. There is obviously not going to be any prosecution of that. It almost feels as though this is the sort of thing that they’re going to bring charges on to- To

Kathryn Rubino:

Show, “Oh see, we’re not being soft on crime.”

Chris Williams:

Right, right.

Joe Patrice:

Yeah. Now if I were advising any of these people, which I am not, I think this would be a good time for all of them to write letters to the editor of their local newspapers explaining how Donald Trump is great and they have always loved him. Get on that pardon train as quickly as you can.

Chris Williams:

And Yale law grad, not Harvard, so not woke and there’s potential there. Yeah.

Kathryn Rubino:

I think one of them was a Columbia law school grad, one was-

Chris Williams:

New York.

Kathryn Rubino:

Yale.

Chris Williams:

Got to play those associations while you can. And they can definitely afford the parton.

Joe Patrice:

Yeah. So all right. Well, let’s take a break here and we’ll be back in a minute. All right. The other big event of last week that spanned several stories before it was all over is the Supreme Court basically struck down functionally the Voting Rights Act, of course. So they didn’t really strike down Section two, but they bonked only- Mostly did. … stuck down Section two. Yeah. And in doing so, allowing Louisiana to get rid of its majority minority districts, because as they pointed out racism’s over, the result of that was every state in the South immediately moving to get rid of their Black majority districts, which somewhat suggests that might not have been factually true when they said that racism was over in the South. I

Chris Williams:

Tried explaining what this outcome meant to … I was at a Derby party and they were like, “Well, why don’t we just have it so that we have everyone gets an equal vote?” And I was like, “Well, one, that’s called actual democracy rather than representative democracy. And the reason we don’t have that is because of white supremacy.” So I had to explain to him why there was a racial animus behind this.

Joe Patrice:

Yeah. I mean, the purpose of the Voting Rights Act and this whole line of cases is that even if you give the universal suffrage, if you organize it in such a way that that vote is consistently placed such that it always will be uncounted or overwhelmed by other votes, it raised the question of whether or not this defeats the right itself and that is why we have all these laws which we no longer appear to be applying. But to the point about whether or not this was true or not, the results of the last week suggest that clearly racism wasn’t over and it was pretty clear when you look at the opinion and find that Sam Alito who wrote the opinion included some studies to back this up. The guardian did some research and discovered that those studies were fake and thrown in the opinion.That’s

Kathryn Rubino:

A bad look.

Joe Patrice:

They were based on real numbers, but the studies themselves fudged a bunch of stuff to get the results that they certainly wanted. The stuff comes from the DOJ’s brief on the matter unsurprisingly. The DOJ inserted itself, even though theoretically the DOJ’s role would be to insert itself in this case to defend the law that’s on the books. They chose to do the opposite and to attack the law and included these fake studies. Lito then dutifully copied them because they helped his reverse engineering of the opinion and they got caught. This is not the first time this sort of thing has happened. We had the wedding designer case a few years ago to strike down discrimination laws that turned out that that was all fake. The whole factual conditions behind it was like the whole scenario was made up.

Kathryn Rubino:

This should be a bigger deal. I mean, I know you write about it, we write about it, you wrote this particular story, but I know that we talk about it, but people should be outraged by this.

Joe Patrice:

Yeah.

Kathryn Rubino:

And then the chief justice has the absolute positive audacity to get annoyed that people think that the court is a political actor.

Joe Patrice:

Well, and that’s true and I will add, so this kicked off what we usually get after a decision like this, which is the PR tour. So we had Roberts go out and say that he’s very disappointed in everybody for saying that the Supreme Court is political as they just rewrite the election laws in the middle of an ongoing election in Louisiana. Then you have Barrett made similar remarks about how the court isn’t particularly political. Gorsuch won’t go that far, but is hawking a children’s book and talked about how made some vague, we’re all in this together kinds of illusions. This is what happens after an opinion like this. There is a drive by the people behind it to try to shore up the idea that they are not actively political despite what we’re all seeing.

Chris Williams:

Unfortunately- Yeah. You think they pull the names out of hats? The way people

Joe Patrice:

Get assigned to do it.

Chris Williams:

Yeah, because the thing that comes to my mind is always Kathryn’s write up of Amy Corney Barrett, political hacks saying, “We’re not political hacks.” And I was like, “We played this game before.”

Joe Patrice:

We play it every year around this time. This particular issue obviously has kicked off all of these attempts to redistrict. Tennessee just voted to get rid of their stuff. It seems like they may run afoul of a problem because there’s apparently a state law in Tennessee that bans that kind of redistricting that they originally said, “Well, we will strike down that law first and then redraw the maps.” And they apparently forgot to strike that law down.That one may still have a couple more hurdles to go, but yeah, this is what’s going to happen. It is all based on a premise that was not true and then they had fake cases over it. The only other angle on this story that I thought was interesting was there was a back and forth between Justice Jackson and Alito a few days later about a different procedural issue that I thought was fascinating because it really speaks to, we’ve talked on the show before about Jackson’s idiosyncratic approach to things,

Which gets her all kinds of criticism where people are like, “She’s talking about all this stuff that doesn’t matter. She’s so dumb.” Which in reality, what she does when you read the context is she’s a big fan of throwing people off by going after something that seems to be irrelevant and then slowly extracting the concessions she needs to draw it back to where it was. And this seemed like another example of that just between the justices. There is a rule that the Supreme Court has that their decisions don’t become final for another month or so. The court decided to unceremoniously and without any real prompting waive that rule in this instance. And she said, “I don’t understand why you’re waving a rule.” And Alito lost his mind screaming and ranting in this opinion about how this is so ridiculous. Why should we be bound by this?

It’s such a small procedural rule. But as he does this, he kind of plays into it. As he explains how no one should be concerned about this, all he manages to do is really draw out the arbitrariness of how this particular rule they’re going to ignore just because it happens to be valuable to their political goal. Wait,

Chris Williams:

What about the shadow docket?

Joe Patrice:

Well, I mean, this is not a shadow docket

Chris Williams:

Issue. Abuse of procedure to do things. I was joking.

Joe Patrice:

Oh yeah, yeah. No, I mean, it plays into all those tools. Yeah, no, definitely. But yeah, I really thought this was another episode of her unique style of just like, I’m just going to kind of sit on this thing that seems like it makes no sense and just watch you

Kathryn Rubino:

Flounder. Which is me is that her colleagues are still falling for it, right? Yeah,

Joe Patrice:

No, Roberts didn’t. Well, sure. Roberts was like, “Whoa, whoa, whoa, I see what’s going on here.”

Kathryn Rubino:

Fair. Some of her colleagues are still falling for it. It seems odd to me that they haven’t gotten the memo.

Joe Patrice:

So is Alito joined by Gorsuch and Thomas and I mean, I’ll go ahead and say that if you were to guess the guys on the court who have the biggest egos and that’s a lot of what this was just like you could have just as easily let this dissent sit there and say, “Well, too bad,” but they couldn’t let her have the last word really basically and that was the trap.

Chris Williams:

My thing is I really don’t understand why the justices play the QT game of we all really get along. I’m not sure what interest that narrative serves. And I think this is one of those examples where just a small thing of addresses saying, “Hey, we’re taking a break from convention here becomes an argument.” It’s like, y’all aren’t as cool as y’all pretend to be.

Joe Patrice:

Well, and I do know the narrative that it serves, that’s the on that allows the current majority to take unprecedented political

Chris Williams:

Action

Joe Patrice:

And then write it off as, “Oh no, but we all get along.” But you’re right, I don’t understand.

Chris Williams:

I would agree, but I feel like the time I heard it most recently was from Sotomayor, wasn’t it? Yeah. So it’s not just this thing that’s coming from the majority.

Joe Patrice:

Well, right. And that’s what I was going to say is that what I don’t understand is why the liberal justices play along with it

Chris Williams:

Particularly.

Joe Patrice:

And it seems as though Jackson has this kind of unique way of not playing along without being overt about it because of the kind of roundabout way that she goes about handles things. But so do my order called out the Kavanaugh situation and then ended up apologizing for it for something that was entirely reasonable and factual. So there was nothing to apologize for, but there we are. Well,

Chris Williams:

The veracity of it required apology. You’re not supposed to speak the truth. Come on now, we’re judges.

Joe Patrice:

But no, I have wondered for a while when we’re going to see justices be a little bit more straightforward about how things are broken. Yeah. And when you’re in this position, there really isn’t an advantage institutionally to staying silent about what’s going on. I think I have long accused Justice Kagan, who I think is very good at what she does, but I’ve accused her long term of taking a finding instances in which she finds common ground with the majority and then it almost as though she’s setting it up to be like, “Well, I kind of agreed on these grounds here and you’re going to return the favor later.” And they don’t because that is not the kind of collegial gam that they are playing and I just-

Chris Williams:

I feel like she has to be too smart to continually fall for the Charlie Brown kick the football set up. And yet here we are. The decorum is not going to be reciprocated. There’s not going to be any point where a Kavanaugh apologizes for saying, “Hey, racial discrimination’s cool actually.” But you have to apologize for saying that, “Hey, that’s what he said.” And I don’t get why they’re too smart to play the game. I don’t know why they still do it.

Joe Patrice:

Yeah. All right. Well, I think that brings us to the end here. Thanks everybody for listening. You should subscribe to the show to get new episodes as they come out, leave reviews, stars, all that sort of stuff. You should be listening to The Jaboq, Kathryn’s other podcast. I’m a panelist on the legal tech journalist round table. We’ve got the Legal Talk Network has other shows to check out Read Above the Law to read these of other stories before they come out. You should be following on social media above the law.com. I’m at Joe Patrice. She’s a Kathryn 1. Chris is at rights for rent all out there and you should follow. And with that, we’ll talk to you next week.

Chris Williams:

Peace. Peace.

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